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African Union to implement a new $1.2 Billion tax plan to support its activities

Member states of the African Union have agreed to fund 100% of the operations of the body instead of relying on donations from foreign countries, Rwanda’s Finance and Economic Planning minister Claver Gatete has said.

The new plan which will start in 2017 will see 0.2 percent of member states eligible imports go toward funding the AU Commission’s programs.

“The heads of state of the African Union took a decision and they gave instruction. They took decisions that Africans, the members countries should finance a hundred percent of the operational activities of the African union commission,” Gatete said on the sidelines of the 27th summit of the African Union that is currently taking place currently in Rwanda’s capital, Kigali.

This formula would generate about 1.2 Billion US dollars meaning that actually it can generate even more money than we are currently generating.

The money will be collected by local revenue authorities and held in central bank accounts, from which the cash will be automatically disbursed.

“This formula would generate about 1.2 Billion US dollars meaning that actually it can generate even more money than we are currently generating. It will be predictable. It will be very easy. It will be collected by the revenue authorities of each of our countries,” Gatete added.

The leaders and their representatives have in the past been finding ways of addressing the body’s funding gap which they have agreed has been a handicap for its operations.

At present, the 54-member bloc sources only 28 percent of its half-billion dollar operational budget from its own members. In addition it has to source an additional $750 million for peacekeeping operations — with the funding gap filled mostly by the European Union, United States, World Bank, China and Turkey.

The AU was once heavily bankrolled by toppled Libyan strongman Muammar Gadhaffi, who championed the institution as a means to challenge Western hegemony before he was toppled during the Arab spring.

The AU supports programs aimed at developing transport, energy, water and telecommunication services in the continent, among others.